June 24, 2013
Posted by Jay Livingston
Cross posted at Sociological Images

America is the global leader in broadband, with high speeds and great service. And it’s all because the government restrained “onerous” regulation and let companies like Verizon do what they want and charge what they want.  So says an op-ed in Friday’s Times.

It was written by the CEO of Verizon, Lowell McAdam.

I pay Mr. McAdam’s company about $115 each month for my land line, wi-fi, and cable (all FIOS).  Mr. McAdam compares the US favorably with Europe, “where innovation and investment in advanced networks have stagnated under an onerous regulatory regime.”  I asked a friend who lives in Paris what he pays for his FIOS phone, wi-fi, and cable.  The monthly bill:  39.90€ ($52) or half of what I pay Verizon.  Maybe there’s an upside to stagnant and onerous. 

There’s nothing wrong with getting what you can afford, and it occurred to me that US broadband is the best because we can afford more.  Onerous regulations or no, most other countries are not as rich as the US.  What if you looked at broadband and per capita GDP? 

The OECD did just that with data from June 2012, and here’s what they found.  (Their several spreadsheets on this are here.

(Click on a chart for a larger view.)

As of a year ago, France had greater broadband penetration despite a lower per capita GDP ($35,133 vs. $46,588)  – 25% more broadband on 33% less income, and at half the cost to consumers.  If you re-rank the OECD countries factoring in per capita GDP, the line-up changes.  Wealthy countries – notably the US and Luxembourg, drop well below the OECD average.

Of course, not all broadbands are equally broad.  Verizon sold me on fibre optical with their assurance that it was dazzlingly faster than their DSL that I had been clunking along on.* This graph breaks down broadband into its various incarnations.

The US is slightly above average on all broadband, but when it comes to a high fibre-optical diet (the dark blue part of the bars), we are ahead of several other countries that have greater total penetration.  On the other hand, the Scandinavian countries are ahead of us, as are, impressively, the Asian countries. 

This is not to deny US advances.  TechCrunch summarizes more recent data from Akamai on these changes:  
the U.S. is currently second in the price of broadband for entry-level users. The nation is also third in network-based competition, second in the fiber-optic installation rate, first in the adoption of next-generation LTE, ahead of Europe in broadband adoption, and doing quite well in Internet-based services.   
Still, the US lags behind other, less wealthy countries.  InnovationFiles, using Akamai data for different variables, has a less congratulatory view.
  • The U. S. has picked up one place in the “Average Peak Connection Speed” that’s the best measurement of network capacity, rising from 14th to 13th as the measured peak connection speed increased from 29.6 Mbps to 31.5 Mbps.
  • In terms of the “Average Connection Speed,” widely cited by analysts who don’t know what it means, the U. S. remains in 8th place world-wide. but we’re no longer tied for it as we were in the previous quarter; Sweden is right behind us on this one.
  • In terms of “High Speed Broadband Adoption”, the proportion of IP addresses with an Average Connection Speed greater than 10 Mbps, we remain in 7th place, but now we’re tied with  Sweden.    [emphasis added]
The title of CEO McAdam’s op-ed is “How the US Got Broadband Right.”  Given the content, I  guess “We’re Number 13” wouldn’t have been appropriate.  Even “We’re Number Seven (Tied With Socialist Sweden)” doesn’t quite have that affirmative zing.

* The most noticeable improvement was that our land line phone.  Previously it had been all but unusable because of static that Verizon could not figure out how to fix. Now it works.  

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